Thursday, 5 April 2007

OFT to investigate changes in distribution of medicines

"Pharmacists and drug wholesalers yesterday welcomed the decision by the Office of Fair Trading to investigate the distribution of medicines in the UK. The OFT's move followed the implementation of a new supply arrangement between Pfizer and UniChem, the wholesale business of Alliance Boots, which had caused widespread concern in the industry.

In early March, Pfizer, the US drug group, made UniChem the sole supplier of its medicines. The pharmaceutical group sells its drugs directly to pharmacists and pays UniChem a set fee to deliver them.

AstraZeneca, the British-based group, and its Swiss rival Novartis have invited wholesalers to tender for a similar direct-to-pharmacy model. The US firm Eli Lilly is also looking at its supply chain in Britain.

Until recently, all drugs were distributed through a network of wholesalers to pharmacists, dispensing doctors and hospitals, which now argue that the Pfizer deal is anti-competitive. The OFT received more than 500 complaints.

Pharmacists warn that the deal could raise costs for the NHS and affect patients. They formally complained to the OFT in November after the deal was announced. Eight of the top wholesalers tried to get a high court injunction at the beginning of March before the arrangement came into effect but the legal attempt failed."

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